Data concerning Bazin Corporation's single product appear below: Per UnitPercent of SalesSelling price$100 100%Variable expenses 20 20%Contribution margin$80 80% Fixed expenses are $384,000 per month. The company is currently selling 6,000 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $9 per unit. In exchange, the sales staff would accept a decrease in their salaries of $46,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 500 units. What should be the overall effect on the company's monthly net operating income of this change?
A. decrease of $64,500
B. increase of $41,500
C. increase of $507,500
D. increase of $27,500
Answer: D
You might also like to view...
Most groups exhibit a structure called a ________ in which some members are somehow better off than others in terms of authority, power, or respect
A) status hierarchy B) social array C) social class D) mass class
Followers with the desire to exceed expectations benefit from ______.
A. directive leadership B. participative leadership C. supportive leadership D. achievement-oriented leadership
An investor that uses the equity method of accounting for its investment in a 40 percent-owned investee that earned $50,000 and paid $8,000 in dividends, made the following entries: Investment in Equity Securities 20,000 Equity in Earnings of Investee 20,000 Cash 3,200 Dividend Revenue 3,200 What effect will these entries have on the parent corporation's statement of financial position?
a. Investment in subsidiary understated, retained earnings understated. b. Investment in subsidiary overstated, retained earnings overstated. c. Investment in subsidiary overstated, retained earnings understated. d. Financial position will be fairly stated.
Those reflecting the ______ school define a social entrepreneur is someone who starts a business with
a social purpose. A. nonprofit sector B. corporate world C. social enterprise D. social innovation